updated 4/2/2005 7:03:06 PM ET 2005-04-03T00:03:06

An investigation into whether the Rev. Al Sharpton was involved in a scheme to defraud a pension fund was based on misinterpreted wiretaps, a prosecutor said Saturday.

Sharpton, who was a long-shot presidential candidate at the time of the investigation, attracted authorities’ attention when he started raising campaign money and discussing business with late Democratic fund-raiser Ronald A. White — then a target of a federal corruption probe at Philadelphia City Hall.

“The bottom line is that we thought something may have been going on with the New York pension fund that we were not accurate about,” Assistant U.S. Attorney Robert Zauzmer told The Associated Press on Saturday.

In a sealed 2003 affidavit, FBI agents alleged there was “probable cause” to believe Sharpton, White and others were conspiring to defraud the New York pension fund.

Sharpton and White’s calls were recorded on FBI wiretaps, and agents used the sealed affidavit to obtain a court order to videotape a meeting attended by both men.

“To put it very simply, we were wrong,” Zauzmer said in court Friday. “If you look at the later (sealed) affidavits, you will see that their names are dropped out as we figure out what (is) going on here.”

Zauzmer said such evidence gathering is typical in investigations and Sharpton was never accused of any wrongdoing.

Sharpton’s lawyer, Michael Hardy, said Friday that his client was pleased by the admission.

“He has always said he didn’t do anything wrong in this case,” Hardy told The Philadelphia Inquirer.

The affidavit stemmed from a long federal investigation into whether city contracts were being traded for campaign contributions.

In the final weeks of Philadelphia’s heated 2003 mayoral campaign, FBI agents crept into City Hall and installed a microphone above Mayor John F. Street’s desk because they wanted to know if he was involved.

The bug in the mayor’s office was quickly discovered by Philadelphia police. Street has not been charged with any wrongdoing.

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